5 Best Things to Do With Your Tax Return

We know. Income tax day is almost half a year away. And if you ask us, that’s a perfect time to be thinking about what you’re going to do with your income tax return. For many Americans, who tend to live paycheck to paycheck, stretched to the absolute limit of what their incomes will allow, an income tax return check represents the only serious chance to buy something they’re been longing for or put money into a high yield savings account.

So, it’s best to plan what you are going to do with your income tax return well before it gets here. Chances are, you have a pretty good idea of what kind of return to expect based on what you’re received the past several years. Of course, if your income has changed drastically, this may not be true, but even still, you should be able to make a fairly educated guess regarding how much you’re likely to receive.

While there are any number of possibilities regarding what you will do with your return check, here are some that we consider the best possibilities:

• 1. Open a high yield savings account. If you don’t already have an emergency fund sitting somewhere where it will earn you a good rate of return, you should consider showing some restraint with your income tax return (or any sudden influx of cash) and open up a high yield savings account with it.
  2. Go on a vacation. Studies have repeatedly shown that people who take regular vacations realize many benefits, including less stress, fewer family problems, less divorce, and higher satisfaction with life. Whether your income tax return allows you to take a holiday in Paris or a weekend upstate, vacations are always a good investment.
  3. Get a new (to you) car. No, you probably won’t be able to buy the whole thing with your income tax return, but you could use the return money for a down payment. Some car dealerships will even help you file your taxes in return for using some or all of the money as a down payment on a vehicle.
  4. Home repairs. Tax time is a perfect time to put those finishing touches on your home that require extra money not typically available. Whether you’re a do it yourself kind of guy, or hire someone else to do the work, consider using that extra money to add value and livability to your home.
  5. Make a charitable donation. Some people will recoil at this kind of a suggestion. If that’s you, pick a different suggestion or come up with an idea of your own. But many of us see charitable opportunities pass us by throughout the year and think, “I wish I had money so I could help with that.” There’s no better opportunity for most of us than when we receive our tax return checks.